Indicators and can they be trusted?
olskran:
what the voltage value of our socket will be in half an hour. Isn't that absurd?
Good afternoon!
If the World Cup is on, during a commercial break there could be a drop in voltage in the socket because everyone goes to switch on their kettles :))))))))
AlexSTAL:
Good afternoon!
If the football World Cup is on, there could be a power cut during the commercial break because everyone goes to switch on their kettles :))))))))
That's a solid observation and a valid conclusion.... thank you!
olskran:
Isn't that absurd?
You don't need to predict in order to trade successfully.
olskran:
trying to predict what the voltage value of our socket will be in half an hour. Isn't that absurd?
Swetten:
You don't need to predict in order to trade successfully.
How's that? Don't be deceptive... No trader just by downloading a particular currency pair chart will just make this or that bet. At the very least, it's flipping a coin, asking his dog for an opinion. The more competent (or perhaps less competent) - will read the press, news, and maybe look at the state of the technical indicators that he liked. So, I am trying to talk about these very technical indicators and nothing more. The most interesting thing is that a lot of programmers put quite modern and, what is the most important, beautiful indicators that characterize the trend of the currency pair chart in one way or another. The explanations are very simple - "look, if it's like this - there are conditions to open a buy order, but if the indicator shows it, then we better open a sell order..." And indeed, there are moments, when according to the history, opening an order at one or another point of the indicator will be reasonable and may (will) bring some profit. But we can show a lot of the same points on the same history when opening of similar orders will result in losses. And there will be more losing orders than profitable ones even though the orders will be opened at the same points of the indicator chart. This raises the question of whether we should trust these technical indicators which are plotted on the basis of the currency pair movement itself and not on the basis of some third-party data. This is what I am trying to talk about. You may argue that the situation should not be assessed by a single indicator. I tried it, we have been over it. We took several (up to 6) different indicators and used the sum of their readings to open some or other orders. The overall result was negative. The statistics is as follows: out of a hundred orders opened and then closed, 70% of them are negative. Here I have a question: is a technical indicator built based only on the data of a currency pair chart and its movements are practically random or it has a movement that depends on many factors which are not considered by our technical indicator in its calculations? The chart of any indicator shows a certain correspondence (ratio) between the indicator readings and the price ratio readings of the currency pair and no more. And this is true because the indicator doesn't receive any third-party information that affects this price ratio of the currency pair. This is what I am trying to talk about in this forum.
olskran:
The indicator does not receive any third-party information
Before you open a position, regardless of whether it is based on an indicator or not, you should make a horoscope and see if you can make money in the time frame you are interested in.
The indicator does not receive any third-party information
olskran:
You can argue that you should not judge a situation by one indicator. I tried it, we've been over it. We took several (up to 6) different indicators and used the sum of their readings to open some or other orders. The overall result was negative.
You can argue that you should not judge a situation by one indicator. I tried it, we've been over it. We took several (up to 6) different indicators and used the sum of their readings to open some or other orders. The overall result was negative.
Most indicators show the same thing. That's two.
There is a brick, a trowel and there is cement, the same for everyone. One gets masterpieces and the other can't build a shed. That's one.
leman:
Before you open a position, indicator or not, you should make a horoscope and see if you can make money in the time frame you are interested in.
No, I'd rather have a coin... or rather 5 pennies... gold... shake it well... and see where there are more eagles to bet on...
Before you open a position, indicator or not, you should make a horoscope and see if you can make money in the time frame you are interested in.
leman:
Do you know the joke about the Chukcha? How he bought an outlet to watch TV in his yurt.
Yes, I'm familiar with such a joke... I liked a saying on one music talk show by A. Gradsky. The conversation was about music. Some show group performed in front of him, with a song and dance on stage. When asked about this performance of A.Gradsky, he interestingly said, "I liked the show, the guys were good on stage, dancing. But what does that have to do with the vocals and the music! In this vein - a lot of technical indicators beautifully convert the chart of a currency pair into their "indicator" chart and that's all. And you will argue to me that this indicator shows this and that.... So what? Yes, this indicator shows on its own graph the correlation of the currency pair price in the past and present and nothing else. Nothing else. But it is impossible to say with any probability, that the currency pair will go up or down on this graph (indicator). And most indicators show how a chart of a currency pair is projected on it and no more. It is PROJECTS due to some mathematical transformations of currency pair price ratios in the indicator chart. You have written quite a few indicators with different names. Please give me an example of one or two with specified entry and exit points and at the same time 75% - 80% of bets made according to your algorithm of using these indicators have a positive result. It seems to me that you simply do not have such an indicator. I think that in principle it cannot exist. It cannot be because the indicator itself is created from a chart reading that we subsequently evaluate using the same indicator. In my opinion, there is a vicious circle of technical indicators that do not receive any information, besides the chart reading itself. Sorry.
Do you know the joke about the Chukcha? How he bought an outlet to watch TV in his yurt.
Aleksander:
No, I'd rather have a coin... or rather five nickels... gold coins... shake it well... and see where there are more eagles to put...
No, I'd rather have a coin... or rather five nickels... gold coins... shake it well... and see where there are more eagles to put...
That seems to me to be the most correct method! I've also seen an advisor like this somewhere...
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Hello, everybody. I just had an idea about the indicators. For example, we load MT4 and obtain some ratio quotations of one currency divided by price of another one. We obtain the value, for example, 1.3425. So, what does this ratio tell us? To my mind, it only shows that there is this ratio on the world (????) currency market at the moment and nothing more. When a new quote is received (a new "tick") this ratio may slightly increase or decrease. I am not a financier or a specialist in international finance and I am probably wrong in my conclusions. But how this quote is formed - in my opinion, this quote is made up of how much of one currency the international banks are willing to sell and how much of another currency the international banks are willing to buy, this is one, the second aspect of this ratio may be the transactions carried out (and not by traders!!!) to buy or sell the currency, which is included in this pair. And these transactions are made by central banks and major banks of the world. The quotes can also be influenced by some statements of politicians of this or that country, the economic situation and forecasts of the economic situation of this or that country, but these reports are quite rare in comparison with the every-minute "ticks" of the price ratio of this or that currency pair. What this "tick" shows us - most likely, what deal (purchase or sale of this or that currency) took place and in what volume (?) - that's basically all. The frequency of ticks, which decreases the ratio of this or that currency pair, indicates only that at a given time one of the currency pairs is selling more and the other is buying more. Any financier, and especially an international one, will give you dozens of reasons why a currency may fluctuate in value against another. Considering that there will be as many reasons for a currency pair to move in the same direction as the other currency, it is very difficult, if not impossible, to "predict" which direction a currency pair will go. The Russian central bank can support the rouble, or it can let it go and this action will be accompanied by a "release" to the market in the necessary and sufficient amount of roubles or dollars or euros. And maintaining or letting go of the rouble depends on many, many factors, including what is beneficial to Russia's economy at the moment. What I wrote all this for is that it seems to me that the movement of this or that currency pair in the short term is almost unpredictable, almost a random process. Of course, if now the Euro-dollar ratio is 1.3542, for example, then the probability that this ratio will be 0.4532 in an hour is very probable, but very unlikely. Most probably, the movement will be carried out in a certain corridor and cenotobanks of many countries will control this corridor of the ratio, but the very movement of this currency pair inside this corridor is (in my uninitiated opinion) almost random or not random, but it depends on so many factors that it turns it into a random process.
So, we obtain (or rather the MT4 program, for example) only quotes of one or another pair and that's it. From the new ratios received in ticks you can "draw" the frequency for this or that period of time by the number of ticks with the increase of the pair's ratio price or the number of ticks with the decrease of this pair's price, the relative (?) increment with every tick of this ratio price (instead of the volumes of bought or sold currency) that's, basically, all. MT4 does not broadcast data about the economic situation of the country, data about the growth or decline of unemployment, quantitative data about exports - imports of goods, quantitative data about investments in the country etc. Only "ticks" with new price ratios for a particular currency pair are broadcast and that's it.
Now the programmers who write the indicators take this data and write indicators that show that...(?) and using this data we all try to determine the possible future course of the chart of this or that currency pair. I would understand if we were constantly receiving statistical data (like ticks) about the turnover of one or another country, unemployment level, investments, the situation in the real estate market etc. and then we would write these or those indicators based on this data and use them to make forecasts about the movement of one or another currency pair. For example, MT4 receives data about unemployment in Europe and the USA, about their trade turnover, export and import, etc. Some indicator would be drawn on the basis of this data and a forecast would be made for EUR/USD pair. But this is not the case. And almost any indicator (by making a mathematical transformation of price relations of one or another currency pair) builds some indicator chart, and then using this same indicator chart of this currency pair we all try to determine the possible movement of the almost random process of the same currency pair. What affects the voltage of your flat's mains socket, expressed to the millivolt? - Yes pretty much everything, a multitude of factors right down to your neighbour turning on the heating element. But we don't know this and we don't get any data about this, we only analyse the present value of the voltage in the socket, we get these values from the device, we process them mathematically (using logarithms, integrals, square roots, etc.), we plot the results of our calculations and try to predict what the value of the voltage in our socket will be in half an hour. Isn't that absurd?
I would very much like to hear the opinion of experienced traders on this issue. Why did it arise? Just because practically none of the "theories" on forex trading methods works or "works", but in rather rare cases that can be attributed to chance and no more. At least that's how it seemed to me...